Health Care Law Blog
The Office of the National Coordinator for Health IT (ONC) released a report on January 29 that identifies optimal healthcare information exchange and implementation standards to enable a nationally interoperable health data information exchange system by 2017 (i.e. standards so that you can have your health records sent and read by all your doctors).
In healthcare, interoperability of IT systems allows providers to share data among different practitioners, insurers, billing and scheduling systems and health information exchanges. Interoperability has the potential to improve the quality of patient care by providing access to accurate, timely information in one location, save time previously used searching for information, and make critical medical information instantly available for clinical decisions.
Under the 2009 economic stimulus legislation’s electronic health records (EHR) incentive payment program, the ONC was directed to establish a governance mechanism for the nationwide health information network. Since that time, however, the ONC has been under increasing criticism about the lack of interoperability of EHRs despite the significant public investment.
Accountable Care Organizations (ACO) are still a relatively new concept in the healthcare world. ACOs emerged in 2011 as a result of an initiative by the Centers for Medicare & Medicaid Services (CMS), as we documented in our blog articles ACO Regulations Finally Released, Braving the New Frontier of Accountable Care Organizations, and Final ACO Regulations are Released - Is this the Beginning of a New Era for Health Care?
While what exactly is an ACO is still kind of nebulous, ACOs generally are groups of doctors, hospitals, and other health care providers, who voluntarily join forces for the purpose of providing coordinated care to Medicare patients. The goal of ACO’s coordinated care is to ensure that patients, especially the chronically ill, receive the correct care at the right time, while avoiding unnecessary duplication of services and preventing medical errors. ACOs that achieve cost saving from providing timely and accurate care that meet quality benchmarks share in Medicare savings. Lofty and worthy goals, no doubt.
According to a recent Modern Healthcare article, up to 9 of the 32 Pioneer Accountable Care Organizations ("ACOs") may be leaving the program. Four have already notified providers of such withdrawal. Of the 9, 4 of the departing ACOs tentatively say they will be joining Medicare's lower- risk ACO alternative – the Medicare shared savings program. The deadline for deciding whether or not to remain in the Pioneer program is July 31, 2013.
Many questions surround the creation and implementation of accountable care organizations ("ACOs"). Included in these questions were concerns about the tax implications of an exempt non-profit organization in joining an ACO. In 2011, the Internal Revenue Service ("IRS") was active in providing guidance on that issue. Specifically, the IRS addressed issues related to inurement or impermissible private benefit that arise from a tax-exempt organization's participation with an ACO. It also considered the unrelated business income tax implications for the receipt of shared savings by an exempt organization.
The U.S. Department of Health and Human Services released the final rules for Accountable Care Organizations ("ACOs") on October 20, 2011. (The final rules will be officially published in the November 2, 2011 issue of the federal register.) The Centers for Medicare and Medicaid Services issued a press release that contains an overview of the ACO initiative as well as relevant links to related documents.
On May 17, 2011, the Center for Medicare and Medicaid Innovation, a part of the Centers for Medicare & Medicaid Services ("CMS"), announced a "Pioneer ACO Model" designed for providers that are already experienced in coordinating care for patients across care settings.
The Pioneer ACO program provides higher risks and greater rewards in the first two years of the program than those available to non-Pioneer Accountable Care Organizations ("ACOs"). Specifically, non-Pioneer ACOs can choose from two tracks that vary on risk and reward under the CMS proposed ACO regulations. Track One ACOs are those involved in a “one-sided model” that begins as a no-risk shared-savings payment system for the first two years and converts to a risk-sharing payment system in the third year. Track Two ACOs are those that are involved in a "two-sided model,” with risk-sharing (of both savings and losses) beginning in year one. Pioneer ACOs also participate in two-sided risk sharing from year one.
The Centers for Medicare & Medicaid Services' ("CMS") long-awaited proposed regulations for the Medicare Shared Savings Program ("Regulation") were released on March 31, 2011. The Regulation is set to be published in tomorrow's (April 7th's) Federal Register. The Regulation is part of a coordinated effort among CMS, the Department of Health & Human Services’ Office of Inspector General, the Federal Trade Commission, United States Department of Justice, and Internal Revenue Service to address the various legal issues facing the Accountable Care Organizations ("ACOs") that will participate in the Medicare Shared Savings Program. CMS is requesting comments through June 6, 2011, while the other agencies will accept public comment on their respective documents only through May 31, 2011.
